# Microsoft Corporation (MSFT)

> Microsoft sells workplace and business software, cloud computing, advertising, gaming, and personal-computer products and services.

- Exchange: Nasdaq · Sector: Technology · Industry: Software Infrastructure
- Headquarters: Redmond, Washington
- Founded: 1975
- Employees: 223,000 (June 30, 2026)
- SEC CIK: 0000789019 ([filings on EDGAR](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000789019))
- Full page: https://inspectstocks.com/stocks/msft
- Data as of: price 2026-09-25; newest filing used 2026-07-29; latest fiscal period ended 2026-06-30

## Grade

**B+** on the growth-and-cash rubric, 4 of 5 checks passed.

| Check | Result | Now | Before |
| --- | --- | --- | --- |
| Revenue growing overall | passed | $331.8B | $211.9B |
| Revenue growing recently | passed | $331.8B | $281.7B |
| Free cash flow positive | passed | $67B |  |
| Free cash flow growing overall | passed | $67B | $59.5B |
| Free cash flow growing recently | failed | $67B | $71.6B |

Business quality (the + / − mark): 6 of 6 checks passed.

| Check | Result | Now | Before |
| --- | --- | --- | --- |
| Profitable | passed | 40.3% |  |
| Healthy profit margin | passed | 40.3% |  |
| Strong operating margin | passed | 46.8% |  |
| Good return on equity | passed | 30.2% |  |
| Debt under control | passed | 0.29 |  |
| Turns sales into cash | passed | 20.2% |  |

How the grade works: the letter counts failed checks (none → A, one → B, two → C, three → D, four or more → F). It is built from SEC filings only — the share price never enters it — and describes the business, not whether the stock is worth buying.

## Key figures

In US dollars, as filed.

| Measure | Value |
| --- | --- |
| Revenue, trailing twelve months | $331.8B |
| Net income, trailing twelve months | $133.7B |
| Free cash flow, trailing twelve months | $67B |
| Net margin | 40.3% |
| Operating margin | 46.8% |
| Return on equity | 30.2% |
| Debt to equity | 0.29 |
| Diluted EPS, trailing twelve months | $17.96 |
| Share price | $516.17 |
| Market value | $3.83T |
| Price / earnings | 28.7x |
| Price / sales | 11.6x |

## What the business does

Microsoft sells software such as Microsoft 365, Windows, and Dynamics 365, and runs Azure, a service that lets customers rent computing power, storage, and other tools over the internet. It also earns money from LinkedIn, search advertising, Xbox games and subscriptions, and devices. Its products serve individuals, businesses, governments, developers, and computer makers.

### How it makes money

- **Productivity and Business Processes: Microsoft 365, Dynamics, and LinkedIn** (42.9% (fiscal year ended June 30, 2025)) — Revenue comes from paid Microsoft 365 subscriptions and licenses, business software subscriptions and usage, and LinkedIn advertising, recruiting tools, and subscriptions.
- **Intelligent Cloud: Azure and server products** (37.7% (fiscal year ended June 30, 2025)) — Customers pay to use Azure computing and other cloud services, and buy or renew server software and support.
- **More Personal Computing: Windows, Xbox, devices, and search advertising** (19.4% (fiscal year ended June 30, 2025)) — Revenue comes from Windows licenses sold through computer makers, devices, Xbox game sales and subscriptions, and advertisements shown with Bing and other search services.

### Products

- **Microsoft 365 and Microsoft 365 Copilot** — Subscriptions for work and personal use that include apps such as Word, Excel, PowerPoint, Outlook, and Teams. Copilot adds an assistant that can answer questions and help with tasks using a customer's work information.
- **Azure** — A service that lets organizations rent computing power, storage, databases, and artificial-intelligence tools from Microsoft's data centers instead of running all of that equipment themselves.
- **Dynamics 365** — Business software for tasks such as sales, customer service, finance, supply chains, and human resources. Customer relationship management (CRM) tools track sales and customer interactions; enterprise resource planning (ERP) tools manage business operations such as finance and inventory.
- **LinkedIn** — A professional networking service that also sells job-recruiting tools, subscriptions, and advertising.
- **Windows** — Operating-system software used to run personal computers and their applications. Microsoft sells licenses to computer makers and businesses.
- **Xbox** — A gaming business that includes Xbox consoles and online services, subscriptions, and games made by Microsoft and other publishers.

### Customers

- Businesses and government organizations buy Microsoft 365, Dynamics 365, security products, and other software through subscriptions, licenses, or usage-based charges.
- Organizations and developers rent Azure computing, storage, databases, and artificial-intelligence services and pay according to their agreements and use.
- Computer makers license Windows for personal computers they sell; individual consumers and businesses also buy Microsoft software, devices, and Xbox products.
- Advertisers pay to reach people through Bing search and other Microsoft advertising services; employers and job seekers also use LinkedIn's paid tools.

### Competitors

- Amazon Web Services, a division of Amazon.com, Inc. (AMZN) — Cloud computing services that organizations rent to run software, store data, and use artificial-intelligence tools.
- Google Cloud, a division of Alphabet Inc. (GOOGL) — Cloud computing services for businesses and developers.
- Apple Inc. (AAPL) — Personal-computer operating systems and devices that compete with Windows computers and Microsoft devices.
- Salesforce, Inc. (CRM) — Business software for sales, customer service, and other customer relationship management tasks.
- Sony Group Corporation (SONY) — PlayStation consoles, games, subscriptions, and online gaming services that compete with Xbox.

### What it depends on

- Azure and Microsoft's artificial-intelligence services depend on data-center capacity and components such as central processing units and graphics processing units; management said customer demand exceeded available capacity in the fiscal fourth quarter of 2026.
- Windows distribution depends in part on computer makers that preinstall Windows on their devices; many of those manufacturers are also Microsoft customers and partners.
- Microsoft's search advertising business uses partnerships with other companies to provide and monetize some search services; management said third-party partnerships affected search advertising growth in the fiscal fourth quarter of 2026.

### What could go wrong

- Microsoft said demand for Azure continued to exceed available capacity in the fiscal fourth quarter of 2026. Delays in bringing data-center and computing capacity online can limit the cloud services it can provide, while investing in that capacity adds costs.
- Xbox revenue declined 10% in the fiscal fourth quarter of 2026, and Xbox content and services revenue also declined 10%. Management cited impairment charges and said it was making changes to the content portfolio, platform, and operations.
- The Windows and devices business faces lower personal-computer demand and higher component costs. Microsoft said these factors, along with a difficult comparison against the prior year, affected Windows original equipment manufacturer and device revenue.

## More on this company

- [Overview](https://inspectstocks.com/stocks/msft)
- [Financial statements](https://inspectstocks.com/stocks/msft/financials)
- [Competitors](https://inspectstocks.com/stocks/msft/peers)
- [Earnings](https://inspectstocks.com/stocks/msft/earnings)

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Source: InspectStocks, built from the company’s own SEC filings. This describes a business — it is not investment advice and not a recommendation to buy or sell anything.